On basic food? No. Non food items are taxed though. So a can of soup, bag of frozen veggies, rice, meat, etc are all not subject to sales tax. Some exceptions apply when you get into single serving bottles and cans of stuff (plus we have CRV on those kinds of things), but as a general rule buying food in a store and preparing it yourself is "rewarded" by you not paying taxes for it, while anything that is prepared is subject to sales tax.

Huh. In Tennessee all that was taxed, just at a lower rate. We didn't have an income tax, though. And I believe, but could be wrong, that restaurant food was taxed at the same lower rate.

Oh, hey! I just looked at a random receipt in my purse and it looks like we don't get charged tax on food stuffs here in Hawaii, either! But there is an income tax, and food here is so **** expensive it doesn't matter.

I'm pretty sure that most states with sales tax follow similar rules with regards to unprepared food items. I'm just surprised that some people aren't aware of this. I blame modern point of sale systems. When I worked a cash register in a store, we entered in prices manually based on the price tag. The register basically had two enter keys, one for taxed and one for non-taxed items. You had to know which items were in which category, so to me this is nearly automatic.

Nope. Not even remotely close. My point was that the employer would get less customers because the relative price of the meal will be higher with no increase in quality.

That's the same freakin thing! How is the "relative price of the meal" be higher unless you made it higher? Why did you make it higher? Because you increased the wages of the waiters. Which is exactly what I said. You believe that an increase of wages = increase in meals. I only assumed the 1:1 ratio.

Gbaji wrote:

My position assumes that customers will tip a standard amount and will take that into account when making their initial purchasing decision

Your assumption is wrong for people who know how to manage money. People who know how to budget their money choose restaurants based on food that they want within a certain price range. That price range is LESS THAN THEIR ABSOLUTE PRICE LIMIT. They go to that said restaurant with their credit/check card and pay within that range. They don't go to restaurants to order food that they can't afford taxes and tips.

As for the waiter, the customer pays the waiter based on their service. If the waiter is douche, they wont get a 15%-25% tip.

There are exceptions, but none of which you mentioned.

Gbaji wrote:

How the **** have you managed to respond to like a dozen of my posts where I've said this repeatedly and you still don't actually know what I'm arguing?

Because I used different wording and you some how believe it was a different meaning.

Gbaji wrote:

Sure. But you argued that this doesn't include the tip. I argue that it does. This is relevant when we're arguing whether waitstaff can be paid less because they get tips.

It doesn't include tips because what you're tipping isn't for the food, but the service of the waiter. Those are two completely different payments. Just because the food funds the waiter doesn't mean anything as it also funds the electric bill, the pay-per-view boxing match, the cable/dish service, water, etc. As a customer, you don't break down the price of the meal into how much watts were used, you just see a meal and a price and you make a determination if it's a good deal or not.

His original response wasn't that employers would get less customers, but that people would subtract the difference of the price raise from the waiter's tip. So, if the meal went up $1.00, then the customer would pay the waiter $1 less.

Nope. Not even remotely close. My point was that the employer would get less customers because the relative price of the meal will be higher with no increase in quality.

That's the same freakin thing!

No, it's not. I added your statement back (and put it in bold) so as to illustrate just how much they are not even remotely the same thing.

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It doesn't include tips because what you're tipping isn't for the food, but the service of the waiter.

The service of the waiter is part of what you pay for when you go out to eat though. You know this when you make the decision to go out to eat. How you pay for it really doesn't matter. The total dollars you pay relative to the total perceived value of the meal does.

Here in Australia we don't tip waitstaff because if they are not prompt, attentive, kind, friendly but not over-hovering, neatly dressed, and hygenic, they get fired. Minimum wage, over $14 per hour. Presumably the better restaurants pay more for their better looking, more glamorously uniformed staff.

I suppose it's relevant that all waitstaff are covered for all healthcare by the government, or can choose any private health insurance they want personally, because they don't have to have the insurance supplied through their employer. Also 4 weeks holiday leave, sick leave, personal leave (for family emergencies).

On basic food? No. Non food items are taxed though. So a can of soup, bag of frozen veggies, rice, meat, etc are all not subject to sales tax. Some exceptions apply when you get into single serving bottles and cans of stuff (plus we have CRV on those kinds of things), but as a general rule buying food in a store and preparing it yourself is "rewarded" by you not paying taxes for it, while anything that is prepared is subject to sales tax.

Coincidentally, in another CA it works the same way. At least, in this part of it.

Ignoring that last clause because it makes no sense at all, most people base their tip on the cost of the meal itself. Hence why most people express tips as a percentage rather than a set dollar amount. Again though, this still kinda misses the larger point that people do account for the full price of the meal when making a decision to buy it in the first place.

And this is why you continually fail to understand. It makes perfect sense, you just don't understand. It's not "missing" the point, it's the entire point.

We first decide on what we want to buy. We order our food and drinks. We get the bill. We start the tip at a percent of our meal, but we then take in consideration of their performance. If it was the best waiter ever, we will tip more. If the waiter sucked, then we tip less. If the waiter was what you expected, you give the normal tip. The % of our meal is just a reference point to tip our waiters. What we actually tip the waiter is based on their service.

Just because my meal cost twice as much as yours, doesn't mean that the waiter did twice the amount of work. So, why should that waiter get paid more for doing the same amount of work? The % is a rule of thumb with the assumption that the more money that you're spending, the MORE food that you are ordering. That isn't always the case.

HOWEVER,

since the tip is based on the service of the waiter, we do not declare a meal with a good value, "over priced", because of a tip. You can tip nothing and just leave if you wanted to be a douche. Those are two completely different prices.

Gbaji wrote:

Sorry, but that's insane. I simply disagree with you on this.

I'm referring to people who know how to budget their money. WTF would you go to a restaurant to buy a meal that you can't afford with tax and a proper tip?

Financially aware people primarily go to restaurants that serve food in their desired price range. They also budget their money well enough that if for some reason, it costs a few dollars more than expected, they can account for that somewhere else or just pay for it with no issues. This is all because they picked a restaurant within their price range. The average person is not going to spend $50+ at Denny's for one meal nor spend $15+ at McDonald's for one meal.

Why you decide to eat outside of your price range is beyond me.

Gbaji wrote:

And every single person who does that is a sale the employer doesn't get. See how that works?

Exactly. The employer doesn't care because that never happens. Well, I guess for you.

On basic food? No. Non food items are taxed though. So a can of soup, bag of frozen veggies, rice, meat, etc are all not subject to sales tax. Some exceptions apply when you get into single serving bottles and cans of stuff (plus we have CRV on those kinds of things), but as a general rule buying food in a store and preparing it yourself is "rewarded" by you not paying taxes for it, while anything that is prepared is subject to sales tax.

But you guys have a state tax, right? Is food somehow taxed in your state taxes? Or is it truly tax-free? I wish it was tax free in TN.

On basic food? No. Non food items are taxed though. So a can of soup, bag of frozen veggies, rice, meat, etc are all not subject to sales tax. Some exceptions apply when you get into single serving bottles and cans of stuff (plus we have CRV on those kinds of things), but as a general rule buying food in a store and preparing it yourself is "rewarded" by you not paying taxes for it, while anything that is prepared is subject to sales tax.

But you guys have a state tax, right? Is food somehow taxed in your state taxes? Or is it truly tax-free? I wish it was tax free in TN.

What do you mean by "state tax"? We have an income tax, which taxes income, and a sales tax, which taxes sales (yay, obvious!). Are you talking about other taxes (tariffs really) on food producers/suppliers/shippers/whatnot? I'm not sure, but I suppose some types of food might. That's more of a subsidy/penalty system though and it's not something the customer pays directly.

I suppose the point is that any such tariffs would apply to any source of food regardless of where it's ultimately going. So to a consumer, that doesn't really matter. However, it does matter that a burger you buy in patties in the store and cook on your own grill will not be subject to income tax, while the one you buy from McDonalds will (in addition to other costs related to someone else making it for you of course). You can see this on any receipt. Buy food at McDonalds, it's all subject to sales tax. Buy food in the grocery store and it's not.

Hope that clarifies things. And given our sales tax is like 8%, that's nothing to sneeze at.

And this is why you continually fail to understand. It makes perfect sense, you just don't understand. It's not "missing" the point, it's the entire point.

It's missing the point because people do exactly that which you insist they don't do. They do it all the time. Repeatedly insisting that people don't take into account the fact that they'll be paying a tip when deciding whether to dine out, or what to order when they do doesn't change the fact that most people do. You may be the one unique snowflake who doesn't, but that doesn't make you right, or me wrong.

Most people don't do what you're saying they do. It's that simple.

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We first decide on what we want to buy.

Yup. And part of that decision is looking at the cost of items on the menu, running it through our automatic "real cost" generator and deciding if it's worth the cost. No one looks at a menu, sees that the steak is $25 and says "I can afford to spend $25, so I'll order the steak!". People assume that on top of that $25 will be another $5 for a drink, and another $2.50 for tax and another $5 for tip. They know automatically that the real cost of the meal will be closer to $40, not the $25 on the menu. If they're not willing to spend $40 for a steak dinner, they'll order something less expensive (like perhaps the chicken).

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What we actually tip the waiter is based on their service.

But unless you are a jerk, it's expressed as a percentage of the meal cost. So you might decide that good service gets 15%, great service gets 20%, and mediocre service gets 10%. Regardless, that calculation is always going to be a function of the base cost of the meal itself. Only a complete idiot thinks that good service gets $5, great gets $10, and lousy gets nothing. Cause you'll be ******* folks off dropping your $5 tip on a $100 bill.

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Just because my meal cost twice as much as yours, doesn't mean that the waiter did twice the amount of work. So, why should that waiter get paid more for doing the same amount of work? The % is a rule of thumb with the assumption that the more money that you're spending, the MORE food that you are ordering. That isn't always the case.

I suspect that you're one of those cheapskates who don't tip properly. Which I suppose explains why you continue to insist that tipping has nothing to do with the meal itself. You're justifying your crappy tipping by telling yourself you're tipping for the service and not the meal, so your tip shouldn't reflect the meal price. It all kinda makes sense now.

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since the tip is based on the service of the waiter, we do not declare a meal with a good value, "over priced", because of a tip. You can tip nothing and just leave if you wanted to be a douche. Those are two completely different prices.

Yup. Makes perfect sense now.

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I'm referring to people who know how to budget their money. WTF would you go to a restaurant to buy a meal that you can't afford with tax and a proper tip?

You've got it backwards. I'm saying that people who can easily afford anything on the menu don't ignore the relative costs of things when making choices. They don't just think "I can afford $50 for a steak" and order the steak. They think "Is the steak at this restaurant really worth $50?" and/or "Do I feel like spending $50 for a steak dinner?". I have repeatedly told you that it's not about what people can afford, but whether they think the price is worth the meal they're going to get. And that assessment is going to include the full cost, which will include the tax and tip.

I keep explaining this to you, but you keep going back to this bizarre idea about people not being able to afford the meal. That's not it at all.

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Financially aware people primarily go to restaurants that serve food in their desired price range.

Yes. And that desired price range includes the total cost of the meal, which includes tax and tip. If I prefer to drop about $50 on dinner when I go out, I'll go to a restaurant where I estimate the entire cost of the meal, including appetizers, drinks, desert, tax, tip, etc will cost about $50. Because that's my target range. And if there's a selection of things on the menu, and some will push that total cost outside my desired range, I'm more likely to order something else instead.

The point being that if you increase all the prices on the menu by some set amount to account for higher wages for your waitstaff, it will push the cost of your meals outside that range for some people who might otherwise eat dinner at your restaurant. Again, it's simple supply vs demand.

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They also budget their money well enough that if for some reason, it costs a few dollars more than expected, they can account for that somewhere else or just pay for it with no issues. This is all because they picked a restaurant within their price range. The average person is not going to spend $50+ at Denny's for one meal nor spend $15+ at McDonald's for one meal.

Yeah. You have no clue how "financially aware people" do things. Seriously. I haven't sweated the cost of anything I've purchased for a decade or more, and certainly not the cost of a dinner bill. But that does not mean that I don't look at the prices on the menu and decide if the meal is worth the price. You're still kinda stuck on the idea of what someone can afford and failing to get that people who can easily afford to eat anywhere they want still think in terms of cost vs value. They can afford more things because they don't base what they spend on what they can afford.

This is a hard concept for most people to grasp because most people never step outside the assumption of increasing consumption to equal (or even exceed) income.

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Why you decide to eat outside of your price range is beyond me.

Yeah, still completely missing the point. I may make the decision to order one dish over another at a restaurant because one is $5 more than I think it's probably worth. I don't make that decision because I can't afford to spend the extra $5, but because I don't think that dish is worth the amount being asked. Not sure why I have to keep explaining this to you over and over, but there you go.

If you go into a restaurant, and the NY strip is $40, and the chicken salad is $35, you'd be right to think the chicken salad would have to be some amazing salad to be worth $35 (Or the NY strip is particularly terrible). It has nothing to do with the final price, or whether you can afford it, but simply an assessment of the relative value of things on the menu. Similarly, if you go to restaurant A and they are charging $40 for NY strip, and restaurant B is charging $60, unless there's something significantly better about restaurant B (the decor, service, or food) to justify the price, you'll probably go to restaurant A instead. If the only difference is that restaurant B pays their waitstaff a higher wage and all their dishes are similarly higher priced, and the service is otherwise identical, decor is the same, both expect a tip, and food is the same, I'll be going to restaurant A instead. Only an idiot would choose differently.

I'm assuming she means state sales tax. As opposed to city sales tax. Where I'm at it's 4% to the state and 2% to the city for a total of 6%.

Oh. Ok. In California we don't usually make a distinction. It's just the "sales tax". Of course various cities/counties may have some minor increase, but stores don't make a distinction usually. Your receipt will just tell you how much tax you paid. it might be 7.5% in one area, or 8.25% in another, but no one really thinks in terms of separate taxes. It's more of a language thing I think.

Do you mean any food that can be purchased with an EBT card isn't taxed (regardless of how its purchased), or only food purchased with an EBT card isn't taxed? Cause if the latter that's pretty messed up.

Eh, I wouldn't call it that messed up. If they taxed it, it'd be taxing tax money...

It's messed up because you're deciding to tax food, making it more expensive and thus more likely to not be as affordable, but then not taxing it if you're on a government assistance program (ironically designed to help people who can't afford food). You should either decide that food is a staple necessary thing and not tax it, or decide that it's not and tax it. The idea that you tax or not tax it purely based on the method of payment is bizarre at best.

The fact that it's "taxing tax dollars" is also beside the point. You're taxing the purchase. That's what sales taxes are about. And the level of those taxes are determined based on how much money the state/city/whatever intends to collect. So, if you exempt one set of things, you must increase the amount on other things in order to make up the difference (all else being equal). What this means is that the state is effectively concealing the real cost of food stamps by hiding it in the extra sales tax everyone else is paying for food.

I decide to give you 10 dollars because you can't afford to buy food and it's been determined that what you need to get the food required is 10 dollars. But if you buy food with that 10 dollars I take 1 dollar of it, meaning you only get 9 dollars worth of food. So instead I give you 11.11 dollars, and take the 1.11 when you buy it your 10 dollars worth of food.

Or I just give you 10 dollars and say "Hey, since this is money from me, I'll just keep the 1.11 you would pay me and let you buy this food without taking money back.

I decide to give you 10 dollars because you can't afford to buy food and it's been determined that what you need to get the food required is 10 dollars. But if you buy food with that 10 dollars I take 1 dollar of it, meaning you only get 9 dollars worth of food. So instead I give you 11.11 dollars, and take the 1.11 when you buy it your 10 dollars worth of food.

Except that the normal price of that food in the market is $11.10, since that's what it cost before you created the food program. So making it cost less for the food program only hides the actual cost. You're using the fact that the same agency which is funding the food program is also charging you taxes on food to hide some of the cost.

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Or I just give you 10 dollars and say "Hey, since this is money from me, I'll just keep the 1.11 you would pay me and let you buy this food without taking money back.

You're forgetting where the money comes from. Let's start by assuming this is all state funding (it's not, but we'll pretend it is to make this more clear). That money comes from your fellow citizens, right? So we start with no foodstamp program. $10 worth of food costs $11.10 to buy because we have a tax on all food. Then you introduce a foodstamp program. But you decide to not charge sales tax on food purchased through the program (but still charge it to everyone else). But because of this, your total tax revenue from food purchases will decrease by the amount of foodstamps you are printing. So you will lose $1.10 for every $10 of food stamps in this example.

In order to make up that difference, you will have to raise taxes slightly (or shift tax dollars from somewhere else) in order to allow the food stamp program to buy food at a lower price than everyone else. It may seem like a minor accounting issue, but it's actually kinda significant. The money doesn't come from the state and back to the state. It comes from the people in the form of taxes. The point being they're paying for $11.10 worth of food, but the government's making it look like they're only paying $10. The other $1.10 is hidden in the increase in other taxes that have to make up the difference. So when the government is asked "how much are we spending on food stamps" they can give a number that is lower than the actual market cost of the food itself. The extra money is hidden from view, but "the people" are still paying it one way or another. They have to be.

This is also beyond just the terrible incentives this creates. You're creating a bigger "gap" between those who can afford food and those who can't. I'll point out again that if the food stamps aren't themselves subject to tax, you'll have to make up the difference by raising taxes on everyone else (just a bit). This means that some number of more people now wont be able to afford food, and will have to go on food stamps. This requires more tax burden to shift on everyone else, rinse, repeat.

It makes it harder for people to move off food stamps as well, and may encourage people right on the edge to find ways to qualify for EBT if they can. Not having to pay sales tax on food is a great incentive for people to get onto the program. Presuming that we want such programs just for those who absolutely could not afford to buy food without them, and we want to encourage them to get off the programs as soon as they possibly can, this would seem to be exactly the wrong thing to do. You're making the jump from the weekly grocery bill while on EBT to that off EBT that much higher than it would be otherwise.

I could probably list off reasons all day long why it's a terrible way to do things. Unless your objective is just to maximize the number of people you can get on public assistance, that is. And yes, some of us suspect that is exactly why some of these programs are set up the way they are.

Oh. It occurs to me that I haven't explained a key assumption which I suspect many of you might not have thought about:

Food stamps aren't actually used to buy food.

No, I'm not talking about people buying cigarettes and alcohol and whatnot (although that certainly happens as well). I mean in terms of the fungible effect that food stamps have on the market. Let me explain:

Let's start with the assumption that no one is going to starve in the US even without food stamps. There are so many places to get food if you are truly hungry that it's laughable. More charities than you can shake a stick at, nearly anyone will give you food if you need it, etc. The point being that most people can actually afford food. Certainly, most people who are on food stamps can. The whole issue with food stamps isn't really that people actually can't afford to buy food, or can't obtain food in some way, but that the cost to obtain food prevents them from being able to afford other things.

Wait you say. That sounds like crazy talk. Again, think in a macro-economic way. Somehow, whether by charity, or people shuffling priorities, the absolute priority will be food, and everyone will be fed. Thus, the cost for the food for everyone to eat will be paid within the economy. Who pays it is irrelevant, it will be paid. So the dollars spent on food stamp programs don't actually increase the total amount of food purchased in the economy at all (well, or very very little). It can't. It might shift costs from less expensive foods to more expensive ones, but it doesn't actually increase the total volume of food, or the total number of people fed much at all.

Once you understand this, you realize that the actual money spent on food stamps doesn't go towards buying basic staple foods for hungry people, but shifting money that would be spent on those things to other areas. What other areas? No clue. Could be anything, but that's not the point. The point is that the money goes elsewhere. The family who would have struggled to spend $300/month on food will now use that $300/month on something else. That's what the dollars spent on food stamps are actually paying for. I'm not even saying this is wrong, but it's important to realize this. Food is an incredibly inflexible demand item. People have to eat. So giving people money to buy food is much more likely to result in increase money spent elsewhere rather than actual increase money spent on food. It's just the way it is.

Why does this matter? Because if you make purchasing food with EBT tax free, what you're doing in addition to the tax burden shift I mentioned earlier, is essentially giving the person who receives it a tax break on other things they buy equal to the dollar amount of the food stamps. Why is this? Because if we assume you would otherwise have paid $11.10 on some amount of food, but now it costs you $10 off the EBT card, that frees up $11.10 of money you would otherwise have spent on food to buy other things. You can essentially think of that $10 as buying $10 worth of something else plus the sales tax on that $10 item.

This is why that becomes a huge incentive for folks to obtain EBT cards. Which, as I pointed out earlier, is exactly backwards. If you charge the normal sales tax on food purchased with EBT, then the same number of dollars in the program buys the same number of dollars it would if someone were not in the program. You don't have the odd tax effects. Of course, you still get the fungible effects, but that's always part of the beast and should be debated separately. I just think giving people a cost advantage for being on the food stamps system is a terrible terrible idea.

Unless your objective is just to maximize the number of people you can get on public assistance, that is.

While I'm sure your meaning behind this was more "omg, evil liberals securing votes through public assistance." than mine, but I'm sure this is pretty much the idea. Maximize the people you can provide for with the resources you have available, by subsidizing their purchases.

Let's pretend we are dealing with a closed loop system here, with as few interacting parties as possible. 10 dollars is "bare minimum" for food required to live in this example.

There is a source of 100 dollars in tax from other, non 'leeching' folk. They have enough income to cover their 11% tax on food stuffs, and don't have to worry about not getting their 10 dollar value of food intake to survive. They also spend enough on food stuffs to fill that 100 dollars each 'period' (why not?)

That 100 dollars goes to provide 10 people with 10 dollars of tax free food.

Yes, the Government is subsidizing that 10 dollars of food and making it cheaper for the person on assistance, but they are already giving them 100% of the funds anyway.

Maybe I"m too tired to see the problem (It is about a quarter after one here).. It's like if I was charging myself to wire my own basement. Sure I'm losing out on revenue, but it's revenue from my own existing revenue. I won't make more money by giving myself a portion of the money I already have.

Edit: I just realized I was working backward on my 10%, so I just changed it to 11% to make up for it. The tax rate doesn't really matter.

Unless your objective is just to maximize the number of people you can get on public assistance, that is.

While I'm sure your meaning behind this was more "omg, evil liberals securing votes through public assistance." than mine, but I'm sure this is pretty much the idea. Maximize the people you can provide for with the resources you have available, by subsidizing their purchases.

Correct. But you're making it look like you're subsidizing their purchases less than you actually are.

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Maybe I"m too tired to see the problem (It is about a quarter after one here).. It's like if I was charging myself to wire my own basement. Sure I'm losing out on revenue, but it's revenue from my own existing revenue. I won't make more money by giving myself a portion of the money I already have.

It's like you charge people to wire their basements, but some people you wire for free. In order for you to make up that difference, you have to charge the rest of the people more money to cover for those free installations, right? Same deal here.

Your mistake is only looking at half of the equation. You're not considering the existing tax revenue from food purchases.

Imagine there's 100 people and it costs each of them 10 dollars for food. Imagine that you charge each of them a 10% sales tax in order to pay for various things the state needs and that we're spending all that tax money on stuff right now. So right now, the people collectively pay $1000 for food plus $100 for tax is $1100. Right? Ok, you realize that 10 of those people are really struggling to buy food, so you create a food stamp program. You decide that you will raise taxes to pay for their food bills. Maybe it's a direct income tax, maybe it comes out of sales taxes (which applies to more than just food, so it's a larger total number), doesn't matter for our example.

But how much will it cost? Well, the cost to buy food for 10 people is $110 dollars. That's how much they're paying right now. If you gave them money to buy food, that's how much it would cost. But let's say you want it to look like it costs less than it does, cause folks complain about paying for big government programs, right? So you decide you wont tax the food purchased with food stamps. That way you only have to pay $100 for the food. And since the taxes would just come right back to the state anyway, it doesn't make sense to tax it right?

But what happens to the other $10? You were collecting $100 in taxes on food (10% of $1000). Now, only $900 dollars of food purchases are being taxed, so you're only collecting $90 in food taxes. Assuming your spending needs in other areas are unchanged, this means that you don't just need to collect an additional $100 to pay for the food stamps program, but you actually have to collect $110 to do so if you want to continue to pay for everything you were paying for prior to starting the food stamp program. The difference is that the direct "cost" for the food stamps program is on paper only $100. You just make up the tax revenue loss in some other way. So you might raise the tax rate slightly in order to collect that extra $10 that you're missing, but don't connect it directly to the cost of food stamps.

My point is that if you collect taxes on food purchases, then it actually costs the citizens the full amount of the food purchase including tax to provide people with food stamps for that amount of food. You can't pretend that you're somehow saving money by not charging taxes on the food purchased with food stamps. You have to make up that difference somewhere else, because it will come up as a loss of revenue elsewhere. The reason for this, I explained in my second post. The people were buying food prior to you starting the food stamps program. The food will be purchased somehow to feed them.

Not charging taxes on the food seems like just an administrative thing to make things seem easier or something, but it does have the effect of making the program itself seem like it costs less money than it does. It also (as I pointed out earlier) makes for a larger gap between the costs for food on EBT versus not on EBT, thus creating an incentive for folks to get on the program and a disincentive for them to get off of it. There are a lot of people who could qualify for food stamps, but choose not to because they'd prefer to support themselves rather than rely on government help. These sorts of "tricks" make it harder for them to make that choice because it's not just a choice between paying for food or something else they'd like to have, but the food will actually cost them less.

As someone who believes that government programs over time breed dependence and often harm the people they target more than they help, anything which makes it easier for people to end out on such programs and harder for them to get off is a bad thing. I'll point out again that they aren't going to starve if the program doesn't exist. Food stamps really aren't about preventing starvation. They are about allowing people with low incomes to not have to make hard choices between food and other goods. And while I fully agree that sometimes that's helpful and maybe even necessary (especially for families with children), I also happen to think that being forced to make those choices is one of the things that really creates incentives for people to work hard to get out of poverty. Poverty should suck. It should be about sacrificing things you want for things you absolutely need. If it's not, then people wont have as much reason to get out of it. If the government will provide me with food, housing, transportation, etc as long as I earn below a small amount, then that small amount becomes complete luxury money (cause it's all fungible, right). But if I earn more, then some of those benefits may go away (or be reduced), and I may very well be worse off making more money.

There's a potential for massive disincentive to get oneself out of these kinds of programs, so yeah, I think anything that masks those costs and makes it seem like a better deal than it really is probably is a bad idea.

Hmmm. Ok. That was way longer and more complicated than intended. Let me shorten it and explain just the math part (and make sure it's right):

Before, you were collecting $100 of taxes on $1000 worth of food purchases. These taxes are paying for whatever your state needs taxes for. To pay for 10 people's food, you need to raise an additional $100, for a total of $200 in state taxes. Right? This amount is identical no matter how you manage the taxes:

If you charge taxes on all food, including those purchased with food stamps, then the food stamp program will cost you $110. $1000 worth of food will be bought, and $100 worth of taxes will be paid on that food. The people's share is $900 in food costs and $90 in taxes. The government's share is $100 worth of food costs and $10 worth of taxes. Thus we collect the same $100 in taxes which pay for existing state programs. $90 comes from the people, and $10 from the food stamp program (which also came from the people of course). Total cost is $200.

If you don't charge taxes on the food stamp purchased food, then the food stamp program will cost us $100 in direct taxes. $1000 worth of food will be bought, but only $90 worth of taxes will be paid on that food. The people's share is $900 in food costs and $90 in taxes. The government's share is $100 worth of food costs and no taxes. Thus, while we appear to save $10 on the cost of the food stamp program, we only collect $90 in taxes to pay for other programs. We must raise taxes somewhere else to make up that difference in revenue. Assuming we do this, the break down ends out being $90 in food taxes, $100 in food stamp program taxes, and $10 in "other taxes".

In both cases, you end out with the exact same $200 dollar tax bill. In both cases, the actual cost of a program to provide 10 people with food stamps is $110. It does not matter if you charge taxes on the food when purchased, or charge taxes elsewhere to make up the difference, the total cost still ends out being the same. It must include the cost to actually buy the food plus the cost of the tax revenue that would normally be collected for that purchase.

Make sense? I think I messed up the math a bit in my first post, but the general point is the same. It's the same total tax bill either way, but one method makes it seem like the food stamp program doesn't cost as much as it really does and creates a larger cost differential for those on food stamps versus those not.

Hmmm. Ok. That was way longer and more complicated than intended. Let me shorten it and explain just the math part (and make sure it's right):

Before, you were collecting $100 of taxes on $1000 worth of food purchases. These taxes are paying for whatever your state needs taxes for. To pay for 10 people's food, you need to raise an additional $100, for a total of $200 in state taxes. Right? This amount is identical no matter how you manage the taxes:

If you charge taxes on all food, including those purchased with food stamps, then the food stamp program will cost you $110. $1000 worth of food will be bought, and $100 worth of taxes will be paid on that food. The people's share is $900 in food costs and $90 in taxes. The government's share is $100 worth of food costs and $10 worth of taxes. Thus we collect the same $100 in taxes which pay for existing state programs. $90 comes from the people, and $10 from the food stamp program (which also came from the people of course). Total cost is $200.

If you don't charge taxes on the food stamp purchased food, then the food stamp program will cost us $100 in direct taxes. $1000 worth of food will be bought, but only $90 worth of taxes will be paid on that food. The people's share is $900 in food costs and $90 in taxes. The government's share is $100 worth of food costs and no taxes. Thus, while we appear to save $10 on the cost of the food stamp program, we only collect $90 in taxes to pay for other programs. We must raise taxes somewhere else to make up that difference in revenue. Assuming we do this, the break down ends out being $90 in food taxes, $100 in food stamp program taxes, and $10 in "other taxes".

In both cases, you end out with the exact same $200 dollar tax bill. In both cases, the actual cost of a program to provide 10 people with food stamps is $110. It does not matter if you charge taxes on the food when purchased, or charge taxes elsewhere to make up the difference, the total cost still ends out being the same. It must include the cost to actually buy the food plus the cost of the tax revenue that would normally be collected for that purchase.

Make sense? I think I messed up the math a bit in my first post, but the general point is the same. It's the same total tax bill either way, but one method makes it seem like the food stamp program doesn't cost as much as it really does and creates a larger cost differential for those on food stamps versus those not.

This try was not really much shorter and certainly not more succinct than the last attempt. But the addition of numbers adds some texture to the wall ...+1.

Charging tax on food stamp items is just taking money out of the food stamp program and moving it into other programs while losing a percentage of it due to overhead in tax collection. Most government purchases are tax exempt (I'd say all but maybe there's some outlier) because it'd make no sense to spend an extra 7% out of the school desk budget on sales tax just to have 0.03% of that come back around into the school desk budget.

Grocery tax around here is something like 1% on pretty much anything except soda and candy. Local municipalities may tack something additional on.

Charging tax on food stamp items is just taking money out of the food stamp program and moving it into other programs while losing a percentage of it due to overhead in tax collection.

Not charging tax (assuming taxes would normally be charged for the purchase) is just taking money out of the other programs and using it to offset the cost of the food stamp program. Tomayto, Tomahto.

Oh. I'd also argue that there's more tax overhead doing it this way, since now every business that accepts EBT will have to handle the exception for charging tax on those purchases. There's no change to the existing management of sales tax if you just charge purchases with the cards the same as cash from any other customer. So, not seeing the benefit here.

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Most government purchases are tax exempt (I'd say all but maybe there's some outlier) because it'd make no sense to spend an extra 7% out of the school desk budget on sales tax just to have 0.03% of that come back around into the school desk budget.

If it's the government actually buying it for government use, that makes sense. But in this case, the government is handing money to consumers and having them buy products with it in the market. That's not remotely the same thing. When the government hands out a $5000 tax credit to someone who buys an electric car, that's the full amount you get back after you pay the full price for the car. You pay taxes on the full price of the car, not the cost minus $5000. Now, the government can also provide a deduction for the sales tax (and did in the recovery act), but that's a separate part of the deduction and it still comes out of the budget for the program. They don't just declare that part of the cost tax free and make the state take a hit on the tax on the sale. You pay the sales tax, that money goes into whatever taxes on cars goes to. Done. Then the government hands you money back, allocated and authorized for that particular purpose.

By doing this differently with a food stamp program, they are basically taking money from those other programs and shifting it into the food stamp program, just as I said. It's deceptive at the very least. Obviously, the state is free to shuffle funds around as they wish, but it does seem like an odd way to go about it. Also, I think it creates a problem in terms of relative perceived cost to those on the program versus those not. It just seems like they went out of their way to do this in a way that creates more problems and doesn't seem to have any redeeming feature other than being able to respond to critics of the program by showing how little it costs, or how efficient it is, or whatever. So... intent to deceive seems to be the motivation.

I could certainly be missing something, so feel free to educate me if I am.

Charging tax on food stamp items is just taking money out of the food stamp program and moving it into other programs while losing a percentage of it due to overhead in tax collection.

Not charging tax (assuming taxes would normally be charged for the purchase) is just taking money out of the other programs and using it to offset the cost of the food stamp program. Tomayto, Tomahto.

But that money has already been allocated as such. Your way requires the continual collection and allocation of funds that had already been allocated for food purchasing. Seems even more inefficient than usual and for no benefit.

Papa Johns claims that it uses better ingredients. I won't say that they do or they don't, but their pizza certainly doesn't taste better than Pizza Hut or Domino's. I prefer Domino's to Papa John's, and Pizza Hut would be better too if their food wasn't so **** greasy. The local places to eat are way better than all three.

Charging tax on food stamp items is just taking money out of the food stamp program and moving it into other programs while losing a percentage of it due to overhead in tax collection.

Not charging tax (assuming taxes would normally be charged for the purchase) is just taking money out of the other programs and using it to offset the cost of the food stamp program. Tomayto, Tomahto.

But that money has already been allocated as such.

It's allocated out of the sales taxes that are collected. You do understand that many funding bills include the method of generating the revenue to pay for them, right? So if the state increases the sales tax by .25% for 10 years in order to pay for highway improvements, that money is gathered from the increase in sales tax and allocated to highway improvements. Coming along with a food stamp program that now reduces the amount of sales tax collected affects the funding of that other program. So now you have to use some other allocation behind the scenes to shift the money back.

It would be vastly simpler to just allocate funding for the food stamp program based on the normal cost of food. If that includes a sales tax, then it includes that sales tax. That way you aren't forced to make adjustments to what could be several other programs, recalculate their cost versus revenue, etc.

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Your way requires the continual collection and allocation of funds that had already been allocated for food purchasing. Seems even more inefficient than usual and for no benefit.

Nope. Your way (ok, the way chosen by the state in question) does. It vastly over complicates things for no gain other than making it seem like buying a weeks worth of groceries costs less when you pay for it with EBT than with cash.

My way requires no more funding shuffling than already exists. We already collect sales tax. We already disburse that money to the various programs it's funding. Replacing cash with EBT cards and paying the same sales tax means you have to make absolutely zero adjustments to any other programs in any way.

It's a terrible terrible way to do this. And again, I can't see any benefit at all except to make the cost of the food stamp program appear artificially lower than it would to buy that food with cash. That's it. Lots of negatives, and only what I see as a deceptive positive. Anyone is free to come up with a reason you'd do this other than to be deceptive about the cost, but I'm not seeing one.

I thought Papa Johns selling point was refusing to give his workers health insurance.

Freedom Pizza!

Gosh. If only there had been a group of people warning the public about how businesses would respond to the requirements in Obamacare this might have been avoided. Oh wait! There were plenty of us. Sucks that college students will now make even less money because Obamacare has made it too expensive for employers to give them more hours. Should of thought of that before passing the law in the first place (or listened to those of us who did).

I thought Papa Johns selling point was refusing to give his workers health insurance.

Freedom Pizza!

Gosh. If only there had been a group of people warning the public about how businesses would respond to the requirements in Obamacare this might have been avoided. Oh wait! There were plenty of us. Sucks that college students will now make even less money because Obamacare has made it too expensive for employers to give them more hours. Should of thought of that before passing the law in the first place (or listened to those of us who did).

Not really any evidence of it really being the cause though... regardless of the true effects, they can just do exactly what they say would happen and then just say "See, I was right!"

Open that door, I won't be able to afford to hire a person tomorrow. *Opens door.* See? Now I can't hire a person tomorrow.

Gosh. If only there had been a group of people warning the public about how businesses would respond to the requirements in Obamacare this might have been avoided. Oh wait! There were plenty of us. Sucks that college students will now make even less money because Obamacare has made it too expensive for employers to give them more hours. Should of thought of that before passing the law in the first place (or listened to those of us who did).

Not really any evidence of it really being the cause though...

Really? You can't see how a law that says that any employee who works 30 or more hours a week on average must either be provided with health care meeting all the requirements of the law *or* pay a $3000/year fine would result in companies limiting the hours their employees work so as to minimize that cost? That's well beyond mere "evidence".

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regardless of the true effects, they can just do exactly what they say would happen and then just say "See, I was right!"

Sure. They can. But given the absolute obviousness of the reaction to the law as written, it's a bit of a stretch. If we passed a law that said that if you wear green, you'll get slapped with a fine, and people said "Hey. If you do that people will stop wearing green", it's a good bet that when people stop wearing green that it's because of the fine and not some need to be proven right.

I'm about to go on my CHRISTmas break, so I will not be able to entertain your circular dismissal of logic and common sense. However, what I will do for you is recap my point to address your remaining posts. I'll drop in and respond to some posts, but let me know if there is something skipped that you want an answer to.

With that being said......

There are three types of costs:

1. The worth of the meal: The actual nickles and dimes it takes to make a meal.

2. The value: The price decided by the employer to sell the meal based on the worth of the meal and what the consumers are willing to pay for.

3. The total cost: The summary of all prices of the factors (variables and constants) involved in the consumer buying the meal.

Your argument is that employers would have to increase the prices of the meals if forced to pay their employees like the rest of the country. I will counter this in every aspect.

When you start a business, it's an investment. You put down a large sum of money (either earned or borrowed) to pay for ALL of the finances in the first few months. The goal is to be successful to the point where you have earned back the money that you have invested and that your business is paying for itself with enough profit to live off of.

Being an intelligent business person, you realize that Business 101, math and common sense says that 500 sales of $1 products is better than 50 sales of $3 products. Therefore, you realize that the goal isn't to sell a product at the maximum price that a customer will pay, but at a price that the customer thinks is fair which still yields you profit (i.e. the value price). That value price is not the max price nor does it include unknown variables that can affect a customer's purchase (the total cost). Not only are there simply too many variables to account for, they are not controllable at an employer's level (,i.e. the cost of gas, unemployment rate, tax rate, etc.)

Once you have reached that level of success where your business is paying for it's self, THEN AND ONLY THEN do you invest in things such as TV's, wi-fi, cable, elegant decor, etc. You don't start off with them (unless that's the center focus of your business) and even worse, attempt to calculate those additional prices into your once valued price of meals.

Now, for the scenario where you need to raise more money, drop in sales, or in this case having to pay employees like the rest of the nation, there are several ways to accomplish this. Your last resort should be to raise the prices of the value meals.

Your first choice should be something along the lines of advertisement. Restaurants, especially fast food, love to reinvent the wheel on food. They will create a sandwich (created mostly from already existing ingredients) and promote it, take it away and bring it back through out the years. There are several other ways to accomplish this task, but I don't want to make this post any longer than it needs to be.

In any case, increasing the price of your meal will decrease your sales. This is because customers pay for meals based on the value. Your confusion is stuck on the total cost. The total cost is obviously a factor, but it isn't a deterrent for someone (who manages their money well) to pay for a meal that they intended to pay for at a valued price.

For example, I like to order the biggest T-bone or Porter House steak on the menu. From my experience, I know that the price range for such said food is $20-$30 +/- a few dollars. So, if I want to eat a steak, I'm not going to go out with an "absolute budget" under that range. Also, I realize that it may cost a few dollars more. At some point, I will say "that's too much", not because of tax/tip, but because I know that I can get the same food at a better value price. Until I hit that point, I will not allow a few dollars be a deterrent for paying for that meal because I know how to budget money.

If my "eat out" budget is $50 a month and my entertainment budget is $50 a month, I can spend $60 on food and $40 on entertainment and still keep my overall budget balanced. There are several options available.

Employers realize this fact and that is why they focus on the value price and not the total cost. Not only are the variables in the total cost unknown, people buy within ranges of value their price. So, this fallacy that you would have to increase the price of the meal if you have to pay your waitstaff more is just that, a fallacy. Under your assumption, workers pay is affected during promotions. We all know that isn't true. Workers don't get paid less during lunch specials or happy hours. Those times exist to bring in more customers, because people like to feel like that they are getting a good deal even if that means spending more money (i.e. the total cost).

Alma, I'm not going to quote you cause I'm honestly trying to dial down this particular conversation, but I will just say one thing. It's the total cost that is used when determining demand for a product at a given price. Period. You can sit around and insist that it isn't, and that no price other than that printed on the actual menu matters, but you're just plain dead wrong. I don't know how more clearly I can say that. At this point, I'm not even trying to convince you of this, but just hoping that anyone reading this who might not be sure which price matters will not fall into the same mental trap you seem to be in. So in that spirit, I'll present one more argument:

Imagine two identical restaurants. One is 2 miles away from your house and one is 20 miles away. Which one do you go to eat at? The one that's closest, right? That's because the time and gas you spend getting to the restaurant is also one of the factors included in total cost. It's not printed on the menu, but you're going to take it into account when deciding where to go to eat (and where to go to eat is exactly what the restaurant owner cares about).

If the restaurant 20 miles away wants to get your business, he will have to either improve the quality of his food/service *or* decrease the price, so that the extra time and money you spend getting there is worth it. That's really all I've been saying here.

Now imagine two identical restaurants. In this case, instead of one being farther away from you, one pays its servers a higher base salary, which it passes along as a higher menu price (say $5 on any given entree), but otherwise the food, decor, service, distance, and expectation of tip is identical. Which one would you go to? The one with the lower price, right? Just as with the extra cost involved with the greater distance, this extra cost will be taken into account as well. Because of this, some other factor has to be better at the higher cost restaurant for you to choose to go there.

Now imagine two identical restaurants. In this case, instead of one paying a higher salary than the other, they both pay the same base wage (which is based on the "normal" minimum wage as you insist they should), but now one expects you to tip and the other does not allow you to do so (don't worry about how this happens, just pretend that this is the case). Let's also assume that the average total cost for a meal results in a $5 average tip, but all other factors are identical (food, decor, service, distance, etc). Which one will you go to? The one that costs $5 less right? Just like in the example above. It's the same cost difference, so it will have the same effect on the relative demand at one restaurant versus another.

This is why I keep saying that the tip counts against the employer just as though he'd increased the price of the meal on the menu. It's absolutely no different to a consumer when making a decision. The fact that waitstaff are tipped absolutely does affect consumption demand for the product being served. It has to. How this affects the employers business decisions can vary wildly, but your insistence that the tip just plain doesn't factor in is just plain wrong. It must factor in. If it didn't, then none of those other things would either. But we know that they do. You wont travel farther to eat the same food, and you wont pay more for the same food. Paying more is no different if the menu price is higher or there's a tip required at one place but not at the other. It's all about the total cost to the consumer. That's what affects consumer demand.

Well, we just have to agree to disagree because I'm not going to spend this amount of time during my up coming break.

But to address your issues, 20 miles v 2 miles is a unrealistic and dumb comparison because it takes nearly $10 on a meal to see a $1 difference in tax. Yet, one gallon of gas is over $3 and the amount of gas that you use varies on your vehicle, traffic, speed and other factors. So many factors that it is IMPOSSIBLE for an employer to calculate those things in their selling price. How does an employer know that you live 20 miles away? The answer is, he doesn't, therefore he sells based on value.

I'm referencing to 1.3 miles vs 1.5 miles. No normal person will calculate the gas difference of .2 miles. Just like no normal person calculates the gas/power used at home to bake, fry or refrigerate their food nor the gas used to drive to the grocery store.

There are simply too many variables involved in order for you to be able to accurately describe them.

As for your other two scenarios, you are basing them on the fallacy of the necessity of raising menu prices to make up for higher waiter wages. That is completely not necessary and I already proved that wrong in the previous post.

Gbaji wrote:

but your insistence that the tip just plain doesn't factor in is just plain wrong. It must factor in

The fact that you continue to misquote my argument after this much time only explains how you simply don't understand.

----------------- In any case. I proved you wrong in the previous post. You did not counter a single aspect of my point, only to misquote it yet again as above.

People choose to eat based on the value price of the food...I'm not sure what fantasy island you live on, but that's reality.

I eat what the wife makes for dinner. Except for the nights I make dinner, and nights like last night when we were both really tired so we picked up a take-n-bake pizza from Safeway.

We tend to buy things that are on sale and that we have a coupon for. Does that count?

. Time has proven that people will spend more money on things if they believe that they are getting a deal. Buy two and get one free. Do I need two, no, but if I buy two I get one free.

My argument wasn't that people NEVER in any circumstance think of any variables outside of the value, but that those variables (in this case, taxes and tips) are NOT deterrents for the average person to buy the meal of their choice if the meal is at a good value.

If they act as deterrents, then you have no concept of managing money. Simple as that.

"Oh.. 20 oz steak, two sides, appetizer, drink and a dessert for $15? My budget was $15.00, the tax and tip will put me over!"... That contradicts all sales logic which is "people seek deals"

Wow. It's like depleted uranium for a skull. Way to completely miss the point of the examples Alma.

If it costs $5 more to travel to one restaurant than another, it will affect your choice exactly the same as if the menu price is $5 higher, or the requirement for a tip increases the cost by $5. It's the same amount of money. It does not matter what the difference in total cost is exactly. That's not the point at all. It's just an arbitrary number to make the point that people make choices based on relative total cost versus perceived value.

You're arguing exceptions instead of the rule. The rule is that people take into account the total cost of two things when comparing their costs to other factors. You can contrive cases where the difference is so small that most people wont care, but that is just sidestepping the issue. Just because saving a buck isn't super important to you, doesn't mean that saving money isn't important to you. It's just a matter of how much.

If it costs $5 more to travel to one restaurant than another, it will affect your choice exactly the same as if the menu price is $5 higher, or the requirement for a tip increases the cost by $5.

Not at all?

For some it may be not at all. For others, it might be the deciding factor. But a business must take this into account, since some percentage of potential customers will take whatever the cost difference is into effect and that'll affect total sales. Again, this is the basic demand function at work. It's not a mystery, nor is it some crazy theory. Everything else staying the same, if you increase the price of something, you will decrease the demand. Arguing over degrees really does miss the whole point.